Wed, 23 Apr 2003

The existing email system will not survive. Too many people are
receiving too much unwanted email. Too many people are making lots of
money sending email to too many people. Let's assume that the current
system is going to die. What will replace it?

Instead of writing email, people will publish web pages. Instead
of the recipient paying for the resources to hold the email, the
sender will pay for the resources to publish the web page. There's
basically two types of email: mailing lists, and email addressed to
one or more individuals. Let's address the latter first.

Right now, when you send email to someone, you send a message from
your client machine to their server. The email is stored on the
recipient's machine until they read the email. Under the new system,
you would create a web page, and store it on a server. The URL would
be something unguessable like
http://example.com/~nelson/827134282173614682732.html. If I wanted to
send that email to someone, I would point them to that URL. If I
wanted to send it to many someones, I would point a program to that
URL, and it would create an index of available messages.

I'm glossing over some details. In particular, the notification
mechanism. At first, the notification mechanism would be ordinary
email. When you published a message (in essence, like hitting the
'send' button), your publishing software would send a notification to
the recipient(s) using the new protocol. If their computer didn't
understand the notification, then your publishing software would email
a URL to them.

I'm also glossing over privacy. Some people would want to send
encrypted emails. In order to do that, you would have to have a copy
of the recipient's public key signed by yourself. It would work in a
similar method to PGP's web of trust, except that everybody would have
a published public key. Casual encryption is built-in.

Why is this going to help with spam? Because it shifts the cost of
receiving email from the recipient to the sender. Let's say that
somebody tries to notify the entire Internet of their message. Some
people would keep track of how many people are notified. If too many
people are notified about the same message, or about the same server,
then it gets marked as a possible source of unwanted messages. In
order for their spam to be successful, they would have to remain as a
sitting duck the whole time, accessible to blocking.

Sat, 19 Apr 2003

Is air pollution bad, or isn't it? If you were to walk up to any
person of average economic learning (the average is pretty low,
remember), they would say "Well, of COURSE air pollution is bad."
That's a natural consequence of the question. Now ask the question
this way: "Is polluting your air bad?" and you will get a different
answer from a thoughtful person.

This latter question presumes that air can be owned. Does it make
sense to talk about ownership of air? Nobody seriously thinks about
ownership of air because there is no way to control the flow of air.
Air is ordinarily fungible -- one bit of air is just like another. If
the wind is blowing one way one day, and you give me a certain quality
of air, then when then wind blows the other day, it only seems fair
that I should return your air in the same condition I got it, right?
Otherwise you should have a private right of action for redress.

Certainly the current system, wherein "We all own the air",
produces sub-optimal uses of air. In an effort to control abuse of
air, "we" have set rules that allow for controlled amounts of
pollution. This bothers some people, because they put a higher value
on clean air than do others of "us". This is a problem in a
democracy, of course, because whenever you vote, some win, and some
lose. Anybody who doesn't like the current levels of pollution has
obviously lost. Anybody who is polluting underneath those levels is
not doing anything wrong, in *any* sense of the word.

Private property rights lead to a different system for regulating
air pollution. Therein, you would expect that the quality of the air
flowing over your property's borders was identical no matter the
direction of the wind. If it differed, then you would expect to be
compensated by the upwind property owner.

Exactly how that would turn into a system of payments would depend
largely upon the businesses that people create and the available
technology. For example, it's very likely that you would rent the air
pollution rights to your property to a local holding company. That
company would monitor the air quality as needed around the
neighborhood, and send out bills to transgressors. If there weren't
many transgressors, then you would probably end up having to pay the
local holding company.

Now, you might say "But that's horrible! Why should I have to pay
for clean air?" You pay taxes now, right? And those taxes pay for
the EPA, right? You're paying for clean air now. Do you feel like
you're getting your money's worth? Would you pay more taxes if you
knew that would actually result in cleaner air? Some would, and some
wouldn't. That's how free markets work. You pays your money and you
makes your choice. Freedom results in more people getting exactly
what they want, and everybody getting more of what they want more than
our current fiat system of air pollution control.

Fri, 11 Apr 2003

BOCES (Board Of Cooperative Educational Services) is a New York
State educational institution. It's a part of the system of
publicly-funded schooling that New York residents pay for. BOCES
provides various services to public schools. For example, they
provide special education aids and teachers. They also provide
vocational training not available in the schools themselves. They
also provide payoll services and Internet access.

The spirit behind BOCES is a good idea, of course. "Hey, let's
help the public schools by providing services for them that they can't
reasonably provide for themselves, like distance learning." Oh, and
while we're at it, let's help schools pay for this by giving them
state taxpayer money. This will even-out the educational system so
that the level of schooling you get is not dependent upon the wealth
of your school district.

Unfortunately, like all well-intentioned ideas whose implementation
is not critically-examined, BOCES has turned out to be a bad idea.
Not only has it turned out to be a bad idea, any economist could
predict that it was a bad idea beforehand. Why establish a
bureaucracy to provide services which are available on the open
market? There are any number of companies which are happy to provide
payroll services, or Internet access.

Anything that BOCES provides could be simply purchased by schools
that want it. Or not. That's how free markets work. Instead, the
market for services that BOCES provides is very much tilted in BOCES
favor. You don't get state aid if you purchase payroll services from
the cheapest vendor. You only get it if you purchase it from the
"company store".

By interfering in the market, New York State is providing BOCES
with artificial demand. The best thing that New York State could do
is stop providing BOCES with state aid. Let BOCES compete with the
private sector. Fortunately, that is exactly what Gov. Pataki is
doing. He has proposed a 25 percent cut in BOCES aid for the 2003-04
school year, and elimination of aid for many services in the following
year. Thank you, George!

A big raspberry to the Nassau County BOCES.
They're spending your tax dollars to lobby for more tax dollars.
They're also seeking to deceive you in the process. They're implying
that state aid dollars come from some magic pot of gold up in Albany.
Not true, Nassau County taxpayers! State aid comes from your pocket,
goes up to Albany, and then comes back down to your BOCES, diminished
by everyone who has their hands in the till. That would be, um, me,
because your taxes pay more for my county's BOCES than my taxes pay
for your county's BOCES.

BOCES must die, to be replaced by companies that perform those
services in exchange for real money, not funny-money state aid.

Mon, 07 Apr 2003

We have an institution in the USA that we call "medical insurance."
It is nothing like insurance, but instead more like socialized
medicine for employees. If you have a full-time job working for
someone, you very likely have medical insurance. There's a small
deductible, and beyond that most costs are covered by the insurance.

Insurance is subject to a problem called the "moral hazard". Very
simply it is that the person being insured knows more about their need
for insurance than the insurer. For example, if you smoke, or if your
ancestors died at an early age due to a genetically-associated
disease, you need insurance more than the next guy. Paradoxically,
insurers want to sell to people who never need it, and yet the people
who want to buy it are the people who are confident that they'll need
it.

This conflict is resolved by selling insurance to a large category
of people at the same time, for example everyone who works at the
college, or is a member of the union, or who attends the same church.
Membership in those groups is only weakly predicated upon one's need
for insurance. That's good, and it's fine as far as it goes.

It doesn't go far enough. At some point in time; I haven't done
the research to find out exactly when it was, the tax code was
modified so that individuals and corporations paying for medical
insurance were treatedly differently. Corporations paying for medical
insurance found their payments to be an expense of the business.
Individual's medical insurance payments were like any other expense --
non-deductible.

Corporate deductibility of medical insurance payments has had a
perverse effect on medicine. With the system was arranged such that
pre-tax dollars paid for medical insurance, a corporation is able to
purchase more insurance than the employee. To make this work, though,
insurance has to pay for ordinary expenses. That's not how insurance
is supposed to work. Insurance is for uncommon expenses.

In a well-designed system, individuals would choose a doctor and
pay for most health care out of their pocket. This would have the
pleasant effect of causing bad and expensive doctors to go out of
business. It would also encourage a thrifty health care system. Even
so, there would be medical expenses beyond the ability of most people
to pay in a reasonable amount of time. That is what medical insurance
is for -- to cover unforseen expenses. Such insurance has a high
deductible, in the realm of thousands of dollars.

The current system of health care is broken. Because most medical
expenses are paid through insurance companies, the purported
beneficiary, the patient, has no say in the treatment. Patients are
told which doctors they can visit. Doctors are told which treatments
they can prescribe. Hospitals are told how much a treatment will
cost.